Jaitley indicates merger of 12 per cent, 18 per cent GST slabs

Chandrajit Banerjee, director general, CII, said, "The rebound in GDP growth to 6.3%, after the uninspiring performance of the previous quarter is noteworthy and a great confidence booster". The country's fiscal deficit crossed 96 per cent of budget estimates at October-end, according to government data.

Ratings agency CRISIL's research arm pointed out that the rise in GDP growth signalled the fading impact of demonetisation and destocking that preluded the implementation of GST.

While investment grew by 4.6 per cent in Q2 compared to 1.6 per cent in the first quarter on a year-on-year basis, its share in GDP fell to 27.5 per cent from 29.9 per cent in Q1, indicating that GST-related stress in the economy had not dissipated. In the fourth quarter of 2013-14, economy had grown at 4.6 per cent. TCA Anant, Chief Statistician of India, termed the latest GDP numbers as "very encouraging" and said he expects it to show further recovery in the coming quarters.

Jaitley further said, "Government's reforms to push economic growth are working, (and it) can be seen from that: manufacturing has shown robust growth of 7 per cent in Q2 and services at 7.1 per cent".

A day after Finance Minister Arun Jaitley claimed the "days of GST and demonetisation are behind us", he said on Friday that the Goods and Services Tax (GST) had made it easy for traders to spread business activities in any part of the country. "Gross fixed capital formation has also picked up from last year's lacklustre pace".

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"The September quarter GDP growth, he added, is quite a significant trend reversal and has been driven by pick-up in manufacturing".

Former finance minister P Chidambaram, however, said 6.3% growth was "far below the promise of Modi government and potential of the well managed Indian economy".

"Traditionally, July-September is a quarter where a lot of production takes place to cater to festive demand". Since May 2014, out of the 13 quarters, we have clocked upwards 7 per cent eight times, and we fell below 6 per cent only once in the last quarter.

Reversing a downward trend of 15 consecutive months, India's economy grew 6.3% in the second quarter (July- September) backed by an acceleration in manufacturing and mining sectors but agriculture and construction, the two largest employers, continued to disappoint. The growth in public administration, defence and other services also stood at 6 per cent.

  • Ronnie Bowen